KC Museum audit delayed indefinitely

Parting ways. The Kansas City Museum, pictured above, will soon part ways with Union Station, following years of tense relations between the two entities. City Council member Jan Marcason said the split is “inevitable.” Because of the pending split, the audit of the city’s management agreement with Union Station to operate the museum has been indefinitely delayed. City officials are continuing to discuss the next steps for the museum, including a new manager. One proposal is to use the city’s Parks and Recreation Department to oversee the museum’s operations. Leslie Collins

Nine months have passed, and citizens have yet to see a completed audit of the city’s management agreement with Union Station Kansas City, Inc. to operate the Kansas City Museum.

City Council members approved a resolution in January directing the city auditor to conduct an audit of the management agreement and present a scope statement in March.

To date, the scope of the audit has never been presented.

“There’s been some delays on projects (in the past). This one might be an anomaly at this point,” said city of Kansas City Auditor Doug Jones, who’s worked for the city since 1994. “I can’t recall one that’s been held this long. I’m just waiting to be put on the agenda.”

Jones said his scope statement is complete and the next step is to present his statement during the city’s Finance, Governance and Ethics Committee meeting.

Asked about the lengthy delay, Finance, Governance and Ethics Committee Chair Jan Marcason said, “The issue is when we first did the resolution, it was at a point where the museum was still under control of Union Station. Now, we’re working on a separation agreement, so the information we really need in order to make an appropriate separation is a little bit different than the scope of the audit.”

Originally, the resolution stated the audit would examine the execution of the 20-year amended management agreement, which the city entered into with Union Station Kansas City, Inc. in 2007, which put Union Station in charge of the Kansas City Museum’s operations, including storing and caring for the museum’s artifacts. The proposed audit was slated to review allocations of shared expenses between Union Station and the museum, management of the museum’s collections, and include a comprehensive review of how the museum’s 2 mil Museum Tax Levy was being allocated. Annually, the mil levy revenue totals $1.4 million.

For years, Union Station struggled to remain fiscally sound; now that the organization is operating in the black, some citizens and government officials have begun to question whether or not that success resulted from Union Station unfairly dipping into the mil levy funds.

According to Marcason, the audit will no longer evaluate the mil levy.

“It was looking backwards, and what we want to do is look forward to how can we make this a viable, thriving museum and how do we pay a fair price to Union Station for continuing to house the collection and do some curatorial work,” Marcason said, who also sits on the Kansas City Museum Advisory Board (KCMAB). “It’s pretty clear the mil levy has to be spent on the museum’s artifacts and museum expenditures. We don’t have any reason to think it wasn’t spent appropriately. If we ever had any evidence of misappropriation, we would certainly look into it.”

Right now, the focus is on securing a fair separation agreement, she said.

“When you’re talking about taxpayer dollars, it should be done with transparency,” said Missouri state Rep. J.J. Rizzo. “If there are people out there who want to know where those taxpayer dollars are going, they have the right to see how that money is being spent, especially when they’re (Kansas City Museum and Union Station) looking to sever ties.”

Whenever two entities decide to sever ties, the first thing that needs to be evaluated is how the money is currently spent and was historically spent, and who receives which revenue sources, he said.

Over the past six months, multiple constituents have contacted Rizzo regarding the strained relationship between the Kansas City Museum and Union Station and the use of the mil levy.

“There’s one of two things going on in my opinion,” Rizzo said. “There’s either a gross misappropriation of dollars or they’re (Kansas City Museum) not getting the dollars, and I would lean toward the latter. I don’t think they’re receiving the dollars they’re entitled to.”

Just walk inside Union Station and then inside the Kansas City Museum; there’s a stark contrast, he said. While Union Station looks pristine and hosts a myriad of events and exhibits, the Kansas City Museum has been under construction for a decade, he said. To prepare for renovations, museum and Union Station staff packed up all of the museum’s artifacts and displays in 2008 and transferred them to storage, where they remain today.

“The Kansas City Museum hasn’t operated at a 100 percent level in at least a decade. The proof’s in the pudding. You can walk into Union Station and you can walk into the Kansas City Museum and see a noticeable difference in where the dollars are being spent.

“It raises a lot of red flags when the scope of the audit was going to be about the mil levy and how it was spent and now it’s not going to be explored. That’s strange to me. That would absolutely be the road map to find out how the museum has gotten into the state it’s gotten into.”

City Council and KCMAB member Scott Wagner, who spearheaded the audit resolution, said he agrees with Marcason that the audit should now focus on how to best move the museum forward. However, he said the audit would be “incomplete” if it didn’t evaluate the mil levy in some fashion.

Now that the city is planning to take over museum operations, the audit can help the city with its due diligence, he said.

“It would seem to me that if you’re going to make an evaluation that tells the city how to best use the mil levy for the purpose of the museum, then you have to do some analysis as to how the levy has been spent in the past,” Wagner said. “If there is a concern about how the dollars have been used, I think that will be touched on in some form or fashion within that audit – it has to be. Otherwise, you’re not making a comparison to anything.”

Knowing how the mil levy was spent will also help the city to appropriately allocate the mil levy and set a budget for the museum, Wagner said.

Currently, there’s general consensus that the city’s Parks and Recreation Department would oversee museum operations once the separation agreement is finalized, he said. Parks and Recreation Department Director Mark McHenry said his department is the most “logical” department to assume the role. Currently, the department operates and/or owns about half a dozen museums in Kansas City, he said. However, management options are still being discussed.

As for the separation, both Wagner and Marcason agree it will provide the best scenario for the museum.

“I’ve always believed it was a good idea,” Wagner said. “There’s an old adage of ‘You cannot have two masters; you will serve the one and not the other.’ I’ve always believed that ever since I’ve been on the Museum Advisory Board and lived in this neighborhood.

“It was an impossible task to expect Union Station Kansas City to not only take care of Union Station but then also expect them to do the same for the Kansas City Museum. It’s clear that the mission of Union Station does not allow them to do what so many would like to see for the museum.”

A split between the two entities will also provide more fundraising opportunities for the museum, Marcason said.

A native of Historic Northeast, Rizzo said he’d like to see the museum become vibrant once again. As a child, Rizzo visited the museum with his family regularly and recalled the number of community events hosted at the museum.

“It wasn’t unusual to go down there and see hundreds of students going through the museum for a field trip,” Rizzo said. “It was just a vibrant part of our community and it feels like the Kansas City Museum has been in limbo for the past decade. Why is it important to bring it back to what it was and fight for it? I think it encapsulates everything we’re trying to do in Northeast right now. At the end of the day, people want to have a vibrant community like we’ve had in the past. I think the Kansas City Museum is the cornerstone of that.”